Let’s define a lifestyle business. For our purposes, I’ll start with what it isn’t.
It’s not the small retail store being run by someone who doesn’t need the money. A few years ago I was on a judging panel for a business award. One of the finalists told her story of how she struggled and labored to build her company. I was getting pretty impressed, until she mentioned that she hadn’t turned a profit until her 13th year in business. Fortunately, she said, her husband was a prominent surgeon and could afford to absorb her losses indefinitely.
That’s not a business, it’s a hobby. And it’s one that has an unfair advantage against the real businesses that have to compete against it.
I’m also not talking about the fantasy businesses that regularly grace the pages of Inc. Magazine and Entrepreneur. You know, those stories that read like a cross between People magazine and the Whole Earth Catalog. Where people live in a mountain top retreat, go kayaking with their employees on Tuesdays and Fridays, and sell imported herbal teas on the Internet. I envy them, but the number of such businesses are limited. Most of us are in far more plebeian environments, where the business requires hard work and constant attention.
My definition of a lifestyle business is one that allows you to live the life you want. The business isn’t integral to your lifestyle, as with the mountain-top tea seller’s. It is any business that generates the income you need to achieve your personal vision, and runs well enough to give you sufficient time to spend that income the way you choose. It can be any business, as long as it is one that can be separated from your personal life.
I’ve observed that most small business founders are seeking a lifestyle business. Their dreams include some base line achievements; financial security for their families, the ability to retire in comfort, and a few weeks of vacation without calling in to run the company by remote. I think those are the trip wires for defining the beginning of a lifestyle business.
Those basics are really just the criteria for a well run business. It has to go a bit further than that for a business to truly achieve “lifestyle” status. It mostly revolves around coming and going as you please. Depending on your interests, it may be working a four day week, or leaving at 3:00, or taking the children to school each day before coming in. Of course, in order to qualify, you can’t be slammed when you return as the price of your “free” time.
It also has to fund not only your immediate and future financial needs, but also generate sufficient excess to let you indulge in your chosen activities without sacrificing elsewhere. Private schools are a quality choice, not an economic decision. Recreation destinations are determined by the activity desired, without worrying about time, distance, equipment or cost. Physical fitness regimens are scheduled each day or week, and the business simply has to fit around them.
If you are not in the office, your phone doesn’t ring with problems; they are handled in the normal course of activity. If you say that you are going out, no one is worried about when you’ll be back. If the business has an off month it doesn’t affect your paycheck. When you want information of how the business is running, it is available instantly, preferably on your smart phone.
For the vast majority of small business owners, this is a description of perfection. I work with a number of business owners who have achieved this, or are close to it for extended periods of time. But I also work with many who are well past this point, yet continue pushing the envelope to make the business grow. These are the Legacy Builders, and we’ll discuss them next time.